'Ripe Resource'

"The pot ale and draff could be converted into biofuel as a direct substitute for fossil-derived fuel, which would reduce oil consumption and CO2 emissions while also providing energy security - particularly in the rural and remote homelands of the whisky industry."

Doug Ward, founder of biofuel producer Argent Energy, has been appointed as chairman of the start-up, which has secured private investment from Adelphi Distillery co-owner Donald Houston.

Mr Ewing said: "Turning our whisky industry's by-products into raw materials for sustainable biofuels which can be used to power ordinary family cars is an example of the sort of innovative thinking Scotland excels in."

The initial Napier research project received £267,000 of support from Scottish Enterprise.

Celtic Renewables has since benefited from a separate £70,000 Scottish Enterprise grant to assist in technology scale-up and commercial feasibility.